Insurance Policies for Monetary Policy in the Euro Area

In this paper, we aim to design a monetary policy for the euro area that is robust to the high degree of model uncertainty at the start of monetary union and allows for learning about model probabilities. To this end, we compare and ultimately combine Bayesian and worst‐case analysis using four reference models estimated with pre–European Monetary Union (EMU) synthetic data. We start by computing the cost of insurance against model uncertainty, that is, the relative performance of worst‐case or minimax policy versus Bayesian policy. While maximum insurance comes at moderate costs, we highlight three shortcomings of this worst‐case insurance policy: (i) prior beliefs that would rationalize it from a Bayesian perspective indicate that such insurance is strongly oriented towards the model with highest baseline losses; (ii) the minimax policy is not as tolerant towards small perturbations of policy parameters as the Bayesian policy; and (iii) the minimax policy offers no avenue for incorporating posterior model probabilities derived from data available since monetary union. Thus, we propose preferences for robust policy design that reflect a mixture of the Bayesian and minimax approaches. We show how the incoming EMU data may then be used to update model probabilities, and investigate the implications for policy. (JEL: E52, E58, E61)     

MATCHED PAIRS DISCRIMINATION: METHODOLOGY AND AN INVESTIGATION OF CORPORATE ACCOUNTING POLICIES

The matched-pairs methodology is becoming increasingly popular as a means of controlling extraneous factors in business research. This paper develops discriminant procedures for matched data and examines the properties of these methods. Data from a recent study by Hunt [14] on the determinants of inventory method choice are used to contrast the performance of the different methods. While all of the methods yield the same set of discriminating variables, those procedures that allow for the dependence among observations within a pair provide greater classificatory power than traditional multivariate techniques.     

Perceptions of Partners' Attributions for Depression in Relation to Perceptions of Support and Conflict in Romantic Relationships

People's attributions for their own psychological problems are linked to their interpersonal behaviors and attitudes. However, depressed individuals' inferences about their romantic partners' attributions for their depressive symptoms have yet to be studied in relation to their perceptions of relationship quality. This study examined perceived support from and conflict with partners in relation to perceptions of partners' attributions for depression in 165 individuals experiencing at least mild depressive symptoms. After controlling for relevant demographic characteristics, perceived internal/controllable psychological attributions were related to greater perceived conflict and lower perceived support, and perceived controllable biological attributions were related to greater perceived conflict. Perceived external/uncontrollable psychological and uncontrollable biological attributions were unrelated to perceived support and conflict. Findings suggest that perceived attributions may help explain the link between depression, support, and conflict in romantic relationships.     

Computing factors for exact two-sided tolerance limits for a normal distribution

A self-contained FORTRAN subroutine is provided which computes factors for Wald-Wolfowitz type tolerance limits allowing arbitrary combinations of sample size n and degrees of freedom ν. The exact calculations from our program reveal inadequacies of two existing approximations, especially when ν ? n. Numerous applications where ν ≠ n ? 1 are cited; two of these are discussed and illustrated.     

The distribution of cook's d statistic

Cook (1977) proposed a diagnostic to quantify the impact of deleting an observation on the estimated regression coefficients of a General Linear Univariate Model (GLUM). Simulations of models with Gaussian response and predictors demonstrate that his suggestion of comparing the diagnostic to the median of the F for overall regression captures an erratically varying proportion of the values.

We describe the exact distribution of Cook's statistic for a GLUM with Gaussian predictors and response. We also present computational forms, simple approximations, and asymptotic results. A simulation supports the accuracy of the results. The methods allow accurate evaluation of a single value or the maximum value from a regression analysis. The approximations work well for a single value, but less well for the maximum. In contrast, the cut-point suggested by Cook provides widely varying tail probabilities. As with all diagnostics, the data analyst must use scientific judgment in deciding how to treat highlighted observations.     

Gatekeeper's response: A rejoinder

Gender, marital status, age, and race were considered in relation to the amount and assessment of social ties among 1,124 unmarried men and women aged 40 and over. When there were significant effects of marital status, widowed people tended to be advantaged in amount and supportiveness of their informal ties, although the influence of marital status was affected by age and race. Contrary to some literature, gender differences in social relationships favoring women were not consistently observed. The oldest never married may have the greatest potential needs for affective and instrumental support.     

PATHOLOGICAL INTERNET COMMUNITIES: A NEW DIRECTION FOR SEXUAL DEVIANCE RESEARCH IN A POST MODERN ERA

This article explores the impact of the Internet and related technologies on the nature of deviant behavior, deviant communities, and the future of deviance research. The idea that pathological communities, once largely suppressed by time, space, and societal restraints, can now create and use virtual communities is focal. Those new communities may expand their numbers and/or pathology, while reinforcing their rationales for rule violations. Investigation of these new virtual communities is especially complex for both conceptual and methodological reasons: identity is hard to ascertain in cyber-settings; nationality, ethnicity and other background traits and standard (e.g., random) sampling methods are not feasible. Nonetheless, the impact of communications technology on the creation and expansion of pathologically deviant communities requires exploration to determine whether, for example, immersion and social support lead to satiation-catharsis, more aggressive real-time behavior, and/or increases in the depth and number of pathological sexual preferences.     

Increasing the sample size at interim for a two‐sample experiment without Type I error inflation

For the case of a one‐sample experiment with known variance σ²=1, it has been shown that at interim analysis the sample size (SS) may be increased by any arbitrary amount provided: (1) The conditional power (CP) at interim is ?50% and (2) there can be no decision to decrease the SS (stop the trial early). In this paper we verify this result for the case of a two‐sample experiment with proportional SS in the treatment groups and an arbitrary common variance. Numerous authors have presented the formula for the CP at interim for a two‐sample test with equal SS in the treatment groups and an arbitrary common variance, for both the one‐ and two‐sided hypothesis tests. In this paper we derive the corresponding formula for the case of unequal, but proportional SS in the treatment groups for both one‐sided superiority and two‐sided hypothesis tests. Finally, we present an SAS macro for doing this calculation and provide a worked out hypothetical example. In discussion we note that this type of trial design trades the ability to stop early (for lack of efficacy) for the elimination of the Type I error penalty. The loss of early stopping requires that such a design employs a data monitoring committee, blinding of the sponsor to the interim calculations, and pre‐planning of how much and under what conditions to increase the SS and that this all be formally written into an interim analysis plan before the start of the study. Copyright © 2009 John Wiley & Sons, Ltd.